February 8, 2011

HERE'S AN IDEA...:

Which Parts of Stimulus Worked Best? (Justin Lahart, 2/07/11, WSJ)
“Without a counterfactual, the best we can do is fall back on our models,” write Dartmouth College economists James Feyrer and Bruce Sacerdote in a paper published by the National Bureau of Economic Research.[...]

What they find is that the stimulus package did boost the economy — though not by as much as the administration assumed it would when it put the plan in place. One reason why, they find, is that money spent to support education and law enforcement did little to improve employment. But programs to support low-income households were highly stimulative, as was spending on infrastructure projects.

“This all suggests that a stimulus package that did not include state level grants for local services would have been more effective per dollar than the actual stimulus package,” they write.
...if you want people to spend the money give it to people who need to spend it.

Posted by Orrin Judd at February 8, 2011 6:45 AM
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